GCC

Revealed: The 30 most valuable non-banking companies in GCC

ROE is one of the important parameters that is used to evaluate the strength of the company as well as the return the company generates for the equity holders. ROE is also a measure of efficiency of functioning of the company. Debt to equity (D/E) indicates the leverage and thereby the risk the company faces due to its capital structure. As D/E ratio is a comparative measure, we have ranked the companies based on the measure to indicate companies that...

Planned GCC remittance tax could cost members economies in the long run

Though the idea is enticing and could – assuming a flat-rate remittance tax of 10 per cent – add US$10 billion to the non-oil income of the GCC region on an aggregate basis, the introduction of such as tax has more downsides, in my opinion. Transfer of money by foreign workers to their home countries represents a significant financial outflow from GCC countries. The World Bank estimates that more than $100bn left the GCC last year in the form of...

What are the GCC region’s high margin industries?

Corporate profits and net margins at an aggregate level have been on a clear downward trend but the aggregate profit margin conceals diverging performances between the different sectors. Profit margins in sectors such as basic materials, industrials, energy, utilities and telecommunication services have been affected by various factors. Subdued activity in the infrastructure space, softening real estate activity and a prolonged working capital cycle have eroded margins for contractors and construction material providers. For firms operating in the energy and...

Let us not miss the trees for the woods

Three questions predominate the narrative: Is the current fall in oil price cyclical or structural? When can we see a strong rebound? (2016 or 2017 or beyond) & Can GCC survive a long spell of low oil price? In fact, the second question is related to the first question. If the current fall in oil price is structural, then we cannot expect any strong rebound. So, may be implicitly we should pray that this is just a cyclical phenomenon. From...

GCC stock markets: Where is the research?

Compared to most developed and emerging markets, the Gulf Cooperation Council’s stock markets suffer from poor research coverage.   The four largest GCC equity markets together enjoy less than a third of the research coverage of other regions, with that available often restricted to large stocks, leaving mid-cap and small-cap stocks mostly ignored from the spectrum.   In the GCC, the major producers of research are a handful of domestic banks and investment houses, which have research as an auxiliary...

Top GCC Risks for 2016 & Beyond

Oil: When will this slide end? With the oil price hovering around $35 per barrel the question remains as to how much longer can OPEC continue with its current policy of pumping as much oil as it can in a quest to win more market share and drive out high cost producers. OPEC member countries produce around 37% of the global crude oil, and disagreements over production ceilings have already affected some of the members. Some of the big producers,...

Why Research Matters for the Economy

From the above table, it is evident that only Kuwait and Qatar are estimated to enjoy a surplus in 2015. Plotting the GCC surplus/deficit from 2004 through 2015 against the average dollar price of crude Brent shows the deep correlation. Thus, diversifying the economy is an imperative for the GCC, on building a competitive knowledge economy and promoting innovation, research, and development (R&D). However, for building a knowledge economy, reliable access to data and information is required, which should be...

The Paris Climate Agreement and Implications for the GCC

The Paris climate change deal will only come into force after it is placed for signatures of approval (from 22 April 2016 to 21 April 2017) by States and regional economic integration organizations that are Parties to the Convention (The United Nations Framework Convention on Climate Change). It is notable that the agreement can only come into force if it has received ratification by 55 countries that represent at least 55% of global emissions. For France that hosted the climate...

Top 20 GCC Mutual Funds 2015

GCC markets are yet to recover following their retreat amid weaker oil prices. Saudi Arabia stocks were affected the most on concerns of deteriorating fiscal position and sustainability of finances. Saudi Index (TASI) declined by 16.6% YTD registering the highest loss among all GCC markets. The Dubai general index registered a loss of 14.6% as investors booked profits amid low international investor participation. Tepid earnings, negative investor sentiments following China crisis and impending U.S Fed hike continue to drag down...

Free-falling oil prices torment MENA markets

  MENA markets liquidity continued its momentum in November, with volume increasing by 20% and value traded by 7.7%, post the lulled market activity in the last quarter. With the exception of Oman and Jordan, other MENA markets witnessed rise in market liquidity, with Bahrain, Kuwait, and the UAE leading the charge. Bahrain showed the most improvement with value traded increasing by 268% and volume traded increasing by 167%, after being the worst hit in Oct’15.       SABIC (KSA)...